Today's Christian Science Monitor has a good piece of explanatory journalism about the federal debt, titled, "Is Rising U.S. Public Debt Sustainable?"

The short answer seems to be, "rising public debt - no; the current public debt - "yes."

First of all, there are two categories of federal debt batched together, but it is the publicly-held debt that matters most. Moreover - and many of you doubtless know this already - that figure is best evaluated against the current gross domestic product, or "GDP" of the U.S. economy.

The current $8.3 trillion total debt tally includes two types of debt: the kind owed to the public (including foreign lenders), and the kind owed from some government entities to others....The public debt is what's most worrisome.

At $4.8 trillion, it is now a higher share of GDP than it was in 1980.

"The bigger our debt becomes, the bigger the 'risk premium' that foreigners are going to demand," in the form of higher interest rates, says Barry Eichengreen, an economist at the University of California, Berkeley.

But if the president and Congress show signs of fiscal responsibility, "then foreigners will be reassured and the day of reckoning recedes."

As a percentage of GDP, the current public debt of the U.S. goverment is rising, but it's been higher, as recently as the mid 90s. Here's a very handy chart (above), courtesy of the U.S. Office of Management and Budget, and the CSM. Please note that the chart's headline reference to $8.3 billion in debt requires some processing. As the article explains - and the chart actually shows - the publicly-held portion of the federal debt, figured into GDP, is what to really look at; and that portion of the U.S. federal debt is now $4.8 trillion, not $8.3 trillion.

So how bad is our debt now, really? Is Bush to blame? And what does the future hold?

Democrats are tarring Bush as the president who squandered the Clinton-era track record of fiscal responsibility. War, tax cuts, and a prescription-drug benefit for Medicare recipients have spurred a return of deficits under Bush. But some of the shifts, good and bad, relate to unforeseen events. Clinton benefited from a lower burden of defense spending, and from surging tax receipts during a record economic expansion. Bush has faced unforeseen costs of hurricanes and security.

As a share of GDP, today's total public debt and the annual deficits look somewhat high, but not outrageous to many economists. The European Union, for instance, expects member nations to hold deficits below 3 percent of GDP and debt below 60 percent of GDP. The US has reached the first target but not the second, using publicly held debt as the benchmark. (Ed. - the OMB/CSM chart, above, shows current U.S. government public debt is well below 40 percent of GDP on a percentage basis, which contradicts the last statement. Presumably, they meant that total debt was more than 60 percent of GDP). The bigger issue is how well America's fiscal health will hold up under the strain of costs associated with baby boomer retirements, which begin in just a few years....Within the range of possible budget paths forecast by the (Congressional Budget Office), one scenario shows interest spending on government debt remaining at today's level of about 2 percent of GDP through 2050. But under a "high spending, low revenue" scenario, interest would cost 21 percent of GDP by 2050.

The low end doesn't sound so bad; but of course the high end does, and Congress has shown little inclination to do more than fiddle at the margins of runaway spending. Realistically, Medicare, Medicaid and Social Security will cost more, not less, in years to come, as our population continues to age and the labor pool and birth rates continue to level off. Perhaps it is time for Congress to take a serious look at my federal deficit reduction plan. Here's Installment Two ("Rosenblog's Road Map To Reduced Federal Spending"); and Installment One ("A Flight Of Fantasy" - scroll down to second item).

TECHNORATI TAGS: FEDERAL DEBT, PUBLIC DEBT, GROSS DOMESTIC PRODUCT, GDP, SOCIAL SECURITY, MEDICARE, MEDICAID, TAX CUTS, IRAQ WAR, HURRICANE KATRINA, GEORGE W. BUSH, BILL CLINTON